Islamabad: The Economic Coordination Committee (ECC) has turned down a proposal to investigate the affairs of the sugar mills that earned extra profits of billions of rupees. The proposal came after market players termed an artificial increase in prices on the back of government’s permission for the export of the sweetener.
The ECC, in a meeting held on December 11, pointed out that sugar prices were gradually coming down in the domestic market and had already been reduced by Rs5 per kg at outlets of the state-owned Utility Stores Corporation, sources say.
“Therefore, the proposal to assess the reasons behind the rise in prices of the commodity does not warrant any further consideration,” the ECC said.
Sources said the Trading Corporation of Pakistan (TCP), in a report submitted to the ECC, made a shocking disclosure that prices of sugar in the international market had decreased, but went up in the domestic market.
Prices in the global market fell in November 2013 compared to the previous month. However, in the domestic market they rose consistently for three months from Rs5, 140 per ton on September 20 to Rs5, 800 per ton on November 18.
“This price escalation occurred despite PSMA’s (Pakistan Sugar Mills Association) claim that surplus stock of sugar was available in the country,” the report added.
Participants of the meeting suggested that since the desired quantity of sugar could not be exported because of prevailing conditions in the international market, the shipment deadline could be extended until February 28, as requested by the PSMA.
It was further proposed that the Ministry of Industries and Production should be asked to assess why sugar prices shot up in the domestic market despite claims of a surplus stock.
Citing lower prices in the international market, the PSMA requested another extension in the shipment deadline until February 28.
According to the State Bank of Pakistan (SBP) data, only 139,615 tons of sugar could be allocated to the mills until December 10, 2013 against the quantity of 500,000 tons which was allowed to be exported.
The ECC stressed that sugar exporters should be facilitated in the export process in order to enable them to earn profits keeping in view the fluctuating prices of the commodity in the international market. For this purpose, they may be given more time for overseas sales, it said.